Spotlight

Indian equity benchmarks closed sharply lower, extending their recent weakness as a fresh surge in crude oil prices and renewed uncertainty surrounding U.S.-Iran talks weighed heavily on investor sentiment. Selling remained broad-based through the session, with the broader market underperforming the frontline indices. PSU banks, realty, metals, autos and financial services were among the major laggards. The India VIX surged around 16% to above 14, underscoring a sharp increase in expectations of near-term market volatility. The session marked a renewed intensification of the broader downtrend rather than the consolidation phase investors had been hoping for.

Crude oil emerged as the dominant pressure point, with WTI rising above $95 a barrel and Brent crude climbing past $108 amid heightened concerns over prolonged supply disruptions. The sharp rise in oil prices added to pressure on risk assets and reinforced concerns around India’s external balances and inflation outlook. The rupee, however, remained relatively stable around the ?95.90-per-dollar zone despite the pressure from elevated crude prices. Gold also remained under pressure as rising bond yields increased the opportunity cost of holding the non-yielding asset.

Global markets now turn to a busy U.S. economic-data calendar, with August PCE inflation and the third estimate of second-quarter GDP due Wednesday, followed by the ISM Manufacturing PMI on Thursday and the September nonfarm payrolls report on Friday. The data will be closely watched for signals on the Federal Reserve’s policy path, with any meaningful shift in expectations likely to feed through to U.S. Treasury yields, the dollar and broader global risk appetite.

Technical View

Nifty 50

Nifty 50 closed sharply lower after facing sustained selling pressure throughout the session. Although the index attempted to stabilize around the crucial 22,800 zone and staged a brief recovery, the rebound failed to sustain, with the index eventually slipping below this level and touching an intraday low of 22,762. On the upside, 22,900–23,000 is likely to act as the immediate resistance zone, with 23,000 remaining a crucial level. Only a sustained move above 23,000 could help stabilize the technical structure and prevent further deterioration.

On the downside, 22,700 remains an important support level. A sustained break below 22,700 could intensify selling pressure and expose the index to lower levels, with 22,500 emerging as the next key support zone. Momentum indicators remain weak, with the RSI around 28, indicating deeply oversold conditions, while the MACD continues to remain in negative territory, confirming persistent downside momentum.

Options data also remains tilted toward the Call side, with cumulative Call OI of around 31.28 crore against Put OI of approximately 19.52 crore, indicating stronger overhead resistance. Notably, the 23,000 strike has the highest Call OI, making it a key resistance level and pointing to strong overhead supply around this zone. Overall, the closing setup remains bearish, although deeply oversold conditions could trigger intermittent technical rebounds.

Bank Nifty

Bank Nifty ended sharply lower after opening with a gap-down and drifting lower through the session. The index broke below the 54,800 support level and subsequently moved within a broad range before closing below 54,500, down nearly 2.00%. On the downside, immediate support is placed at 54,400–54,200, followed by the next support zone at 54,000–53,800.

On the upside, 54,800–55,000, which previously acted as support, is now likely to act as resistance. A sustained move above this zone could improve momentum and support a recovery toward 55,300–55,500. Momentum indicators remain firmly bearish, with the RSI near 23, trading below its average line and deep in oversold territory, indicating extremely weak momentum and strong selling pressure. The MACD remains strongly bearish, with the MACD line below the signal line and the histogram deeply negative, confirming persistent downside momentum.

Options data shows total Put OI at 1.67 crore against Call OI of 2.35 crore, with the PCR at 0.71, indicating bearish positioning. Strong Put OI is concentrated at 54,000, suggesting strong support, while heavy Call OI at 55,000 indicates strong resistance. Overall, the technical setup remains strongly weak to bearish. Although the deeply oversold RSI leaves room for a short-term rebound, a meaningful recovery would require the index to reclaim and sustain above the immediate resistance levels, accompanied by the RSI moving back above its average and the MACD showing a bullish crossover with the histogram improving.